A former Catholic bishop popular with the poor is favoured to win Paraguay's presidential election on Sunday and sweep away six decades of one-party rule.

Opinion polls give Fernando Lugo a narrow lead, which could be enough to usher him in as the newest member of Latin America's "pink tide" of leftist governments.

The bearded 57-year-old heads the Patriotic Alliance for Change, a coalition of centre and centre-left opposition parties, grassroots political movements, farmers groups and other social organisations.

The Colorado party, the world's longest-ruling party still in power, has responded to the mood for change by fielding a female candidate, Blanca Ovelar.

The first woman to run for the top job, she has closed the gap and could snatch victory to join Chile's Michelle Bachelet and Argentina's Cristina Kirchener as another South American female head of state.

A poll by Coin published in the newspaper Ultima Hora gave Lugo 34.5% and Ovelar, a teacher-turned education minister, 29.5%. A third candidate, Lino Oviedo, a retired army general, polled 28.9%. There is just one round and whoever is first past the post wins.

For a landlocked, rural country long considered a sleepy backwater it has been a colourful and bitterly fought election that has echoed leftist surges in Bolivia, Ecuador, Nicaragua and Venezuela.

Lugo has promised to give peasants more land and to charge Brazil more money for the power it imports from the Itaipu hydroelectric plant, which both countries jointly own.

He said if necessary he would take Brazil to the world court in the Hague to renegotiate a 1973 treaty that obliged Paraguay to sell surplus electricity to its giant neighbour at well below market value.

To avoid frightening conservative voters, the former bishop has called himself an independent, not a leftist, and has kept a distance from Venezuela's self-styled socialist revolutionary president, Hugo Chavez.

But he told the Guardian he was determined to tackle corruption and social exclusion.

"The gap between rich and poor is a scandal for Paraguayan society – it's a gap in which the few live at the banquet table while those at their side live in hunger."

Lugo's frontrunner status stems from his image as an outsider and anti-graft candidate. Paraguay languishes in 138th place in Transparency International's benchmark Corruption Perception Index, below Iran and Libya. A third of the 5.6 million population lives in poverty.

"Lugo is somewhat of a spokesman for those who don't feel included in the power structure or economy. If that means he's a leftist, well then he is, but he's not a leftist ideologue," Alvaro Caballero, a political analyst, told Reuters.

Lugo branded the administration of outgoing President Nicanor Duarte as "without doubt, one of the most corrupt governments ever". A campaign poster features Duarte and his candidate, Ovelar, as mosquitoes flying into a cloud of insect repellent. "With your vote, we'll eliminate this plague," the tagline reads.

The ruling party has in turn tried to tar the usurper with wild claims that he was complicit in the kidnapping and murder of the daughter of a former president. He has also been accused of turning his back on God, a serious allegation in this strongly Catholic country.

The Vatican, fearing a throwback to the "liberation theology" era of troublesome, leftist priests, has suspended Lugo. But the Pope is reportedly keen on cordial relations should its rogue former cleric prevail.

The ruling party's grip on state machinery and the tightness of the race have stoked fears of vote rigging. The Organisation of American States, a pan-regional body, said the election would test Paraguay's institutional credibility.